Starting a Business in New York State - a Guide to Owning and Operating a Small Business
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Starting a Business in New York State - A Guide to Owning and Operating a Small Business A Division of Empire State Development A Beginner’s Guide to Starting a Small Business in New York State Welcome to Entrepreneurship This guidebook was prepared to help you get started on the road to a successful entrepreneurship and keep you pointed in the right direction. It gives you information about everything from planning and financing a business to marketing, keeping records and understanding government regulations. It also contains what you need to know about expanding an existing business. In addition to providing a solid overview of small business ownership, this guidebook will serve as a reference to the many programs and resources that are available to new business owners. For the purposes of this publication, a small business is one that is a resident in this state, independently owned and operated, not dominant in its field and employs 100 or fewer persons. These businesses are a vital part of the economic picture in New York State and across the nation. New York Business Express At New York Business Express, you can learn about the licenses, permits and regulations to starting a business in New York State. New York Business Express helps users to quickly learn about and access resources for starting, running and growing a business in New York. The Business Wizard leads users through a series of questions to create a Custom Business Checklist that helps determine which New York State, as well as federal and local requirements apply to their business. The Incentive Guide helps users to find out which New York State programs and incentives they may be eligible. At the Business Index, users can quickly and easily access forms they may need. The purpose of this guidebook is to provide general business information for anyone considering the start- up or expansion of a small business in New York State. It is not intended to be an exhaustive discussion of the laws of New York State, since legal requirements may change from time to time and the application of specific laws to individual cases may vary. This Guidebook was last updated in April 2019. If there are any inactive hyperlinks, contact [email protected] Contents CHAPTER 1: Foundations for Success 1 The chapters follow the sequence of decisions and actions that most CHAPTER 2: Mapping a Strategy 7 entrepreneurs go through, beginning with choosing and CHAPTER 3: Financing Your Venture 12 organizing a business, which is covered in Chapter 1. CHAPTER 4: Selling Yourself 17 Chapter 2 takes you step-by- CHAPTER 5: Keeping the Books 24 step through the development of a complete business plan, CHAPTER 6: Government Regulations 31 which is critical for success. Once a plan is established, you Glossary 37 can begin to look at financing, which is covered in Chapter 3. Appendix A: Entrepreneurship Assistance Centers 39 Your continual success will depend to a great extent on Appendix B: Small Business Development Center 40 marketing, which is discussed in Chapter 4. In Chapter 5, you Appendix C: Empire State Development Regional Offices 43 will find a review of the records you need to maintain to manage Appendix D: Government Agencies 44 your business and meet legal requirements, while Chapter Appendix E: Business Trade Associations 44 6 is devoted to government regulations, including licensing Appendix F: Chambers of Commerce 51 and permits, sales tax, insurance and obligations to employees. Appendix G: Alternative Lenders 56 The last few pages contain information on resources available to you from both public and private sources. CHAPTER 1 Foundations For Success You have always wanted to start your to change, learn quickly, recognize and Assessing Your Resources own business. You’ve thought about correct mistakes, think creatively, be it, dreamt about it, discussed it with enterprising and resourceful, handle Opening your own business is an family and friends, perhaps even discouragement and develop favorable exciting journey that can provide done some research on the subject. solutions to everyday problems. They lifelong satisfaction. But it is also one of life’s greatest challenges and Each year, thousands of New Yorkers also realize the importance of taking risks. also entails making some choices follow their dreams and tackle the Sense of responsibility: Small business that will deeply affect you and the challenges of entrepreneurship and owners are completely responsible people around you. That’s why it’s enjoy the rewards and satisfaction of for what happens to their business. important to get all the information having accomplished something by Long after others have gone home, you can before you start. themselves, of being able to shape they may have to stay on the job their own destiny and contributing tending to any number of details — Education and information: In to their community. Many people getting your bookkeeping in order, today’s increasingly global economy, who take this road wonder why they going over inventory, rearranging education is essential for the business didn’t do it sooner. With the right merchandise, meeting clients or person. In addition to a good general planning, determination and resources, seeing that repairs are made. education, you may want to consider taking specialized courses to enhance you can do it too. Whether you’re Decisiveness: Small business owners your working knowledge of financial thinking of starting a food truck, must make many decisions, and often and other pertinent matters. New York brewery, graphic design, accounting make them quickly. Some entrepreneurs State has many fine learning institutions, service, home improvement, come by that ability naturally; others learn including private and state universities, laundromat, or e-commerce through experience. The best decision- local community colleges, vocational business, this guidebook will help makers consider all the choices open schools, adult education centers and you build a foundation for success. to them, use that knowledge judiciously job training programs that offer a and don’t second-guess themselves range of entrepreneurial development Do You Have What It once a decision has been made. They and business programs, such as the realize that making mistakes is part Takes To Succeed? Entrepreneurship Assistance Centers of the process, and they forge ahead (EAC) and Business Mentor NY. EACs Studies show that most successful with new decisions despite setbacks. entrepreneurs share some key traits. provide new and aspiring entrepreneurs They are usually organized, determined People skills: Small business owners must with training and business counseling people who have a strong sense of get along with people, understand their services to develop basic business responsibility, are not afraid to make needs and inspire their confidence. They management skills, refining business decisions or mistakes, work well with realize that courtesy and understanding concept, devising early-stage marketing other people and enjoy the art of selling. are an important part of dealing with plans, and obtaining business financing. Here’s a look at some of those traits. customers, suppliers, lenders and others To find an EAC in your area, visit who play a key role in their business. Organizational ability: Small business EAC’s webpage at https://esd.ny.gov/ owners must pay strict attention to Marketing: Marketing and selling are a entrepreneurial-assistance-program or details, be self-disciplined and use part of operating all businesses, from Appendix A on page 39. their time efficiently. They must be manufacturing to the service trades. Business Mentor NY is a web-based, able to pay attention to employees, While some people are naturally adept at mentoring program, which assists customers, sales and expenses — all sales skills, others work hard to develop entrepreneurs and established small at the same time. They must be able a sixth sense for marketing know-how businesses overcome challenges to grow to pay bills and wages on time and and opportunities, taking advantage their business. To connect with a mentor, maintain a budget to avoid the roller of the many books, courses, seminars, visit Business Mentor NY at https:// coaster of having surplus funds one and online training available to them. businessmentor.ny.gov/. It is also helpful month and a shortage the next. Do you wonder if you have the right quali- to consult trade journals, consumer Determination: The most successful ties to make it on your own in magazines, web publications, forums, small business owners not only want to business? Take the quiz, “A Readiness and social media on a regular basis to succeed, they are determined to do so. Test”, (see Figure 1-1) to find out. keep up with current news and trends in They have the ability to adjust rapidly your industry. In general, the more you know about the business before you start the greater your chances for success. 1 Figure 1.1 A Readiness Test Take this quiz to find out if you have the right qualities to operate your own business. Under each question, check the answer that comes closest to saying what you feel, then find your score using the key provided. 1. Are you a self-starter? ____ Yes. I like to do things on my own and have a lot of initiative. ____ To a point. I’ll contribute what I am expected to. ____ No. I don’t put myself out unless it’s absolutely necessary. 2. Do you enjoy working with other people? ____ Yes. I like people and can get along with anybody. ____ Sometimes. If people don’t bother me too much, I can get along with them. ____ No. Most people are difficult to work with and irritating. 3. Do you welcome responsibility? ____ Yes. I like to take charge of things and see them through from beginning to end.